Written answers

Tuesday, 23 May 2006

Department of Foreign Affairs

Overseas Development Aid

9:00 pm

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Question 309: To ask the Minister for Foreign Affairs the benefits to Ireland's priority aid countries of entering into an economic partnership agreement which will expose their producers to competition from EU and non-least developed countries' neighbours without gaining new markets for their products in view of the fact that as least developed countries they already qualify for duty free and quota free access to the EU under the everything but arms initiative; if it is not better development policy that these countries be exempted from offering market access to the EU under EPAs; and if he will make a statement on the matter. [19480/06]

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
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The Cotonou Agreement between the African, Caribbean and Pacific (ACP) States and the European Union (EU) provides for the negotiation of Economic Partnership Agreements (EPAs) between the Parties. The EPAs are first and foremost instruments for development that are intended to foster the smooth and gradual integration of the ACP States into the world economy, thereby promoting sustainable development and contributing to poverty eradication.

The intention is that EPAs should create a positive environment for the private sector by enlarging ACP markets through regional integration, and by making regulatory frameworks in these countries more transparent. EPAs should therefore help develop the conditions for south-south trade, with all the benefits of new markets which this promises for the ACP countries.

For the purposes of EPA negotiations, the ACP states are organised into six regional groupings. EPAs are intended primarily to foster trade between, as well as within, these regional groupings. As stated above, the concept of regional integration is fundamental to the EPA process. On their own, the small segmented markets of the ACP countries are poorly positioned to take advantage of the global trading system. Stronger regional integration, which will facilitate an increase in production and competitiveness, is the critical first step toward greater participation in international trade.

On the other hand, the EU's Everything But Arms (EBA) initiative, while offering preferential access to EU markets for all LDC exports, except arms, does not advance the process of integration in the ACP regions. As regards EPAs and competition, it is not intended that EPAs will expose ACP economies to EU competition prematurely. In this regard, Article 37,7 of the Cotonou Agreement provides that the negotiations on the EPAs "shall take account of the level of development and the socio-economic impact of trade measures on ACP countries and their capacity to adapt and adjust their economies to the liberalisation process. Negotiations will therefore be as flexible as possible in establishing the duration of a sufficient transitional period, the final product coverage, taking into account sensitive sectors, and the degree of asymmetry in terms of timetable for tariff dismantlement, while remaining in conformity with WTO rules then prevailing".

Or as Commissioner Mandelson has put it, "the EU is not pursuing an equal bargain in relation to our EPA partners".

Ireland is continuing to follow the EPA negotiations closely. A review of the negotiations is scheduled for this year. At the General Affairs and External Relations Council in Luxembourg in April, which I attended, the Council asked the Commission to ensure that the review is formal and comprehensive, particularly with a view to identifying any measures necessary to ensure the timely completion of the negotiations. On several occasions, I have raised partner country concerns about EPAs with both the European Commission and Development Minister colleagues.

The Cotonou Agreement envisages that EPAs will come into force in 2008. Until that time, it is open to any LDC as to whether they wish to enter an EPA or not. Should they decide not to, they will continue to benefit from preferences under EBA. Ultimately the matter of whether an ACP LDC chooses to enter into an EPA is a sovereign decision for each country.

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